Huge Impact of Poor Management  

We love working with our SME community. There is so much potential for positive change and success. To achieve that managers are aways seeking to improve productivity and often see innovation as the magic bullet. Sometimes the conversation goes onto include streamlining systems and upskilling workers. All of these are important, but research proves the real game changer is improving management skills.  

Christina Boedker, Professor at the University of Newcastle, has researched the impacts of poor management practices via the Australian Workplace Index and found that it is responsible for 33% of our missed productivity opportunities. In the past five years, Australia’s productivity growth has dropped to half of its 25-year average. It costs our economy billions of dollars each year and is probably costing your business too.  

This research isn’t new. In 2004, two well regarded academics (John Van Reenen and Nicholas Bloom) provided robust evidence on management quality’s effect on an organisation’s bottom line, by establishing the World Management Survey (WMS). For 20 years they have assessed and measured management from hundreds of medium-sized firms around the world. The conclusion is overwhelmingly that managerial practice is strongly associated with productivity, profitability, and organisational survival. Data from 20,000 interviews conducted over 20 years across 35 countries, proved that a third of global productivity gaps can be attributed to poor management. 

Christina Boedker has been quoted to say “[Management training] is usually something we do when things have gone wrong. It’s not something that all organisations will proactively invest in. Then they don’t understand why people are leaving or why they have low productivity.” 

She goes onto explain that her research is mainly focused on management practices such as setting goals, monitoring people, providing them with incentives, holding employees accountable and hiring good people. When you add in the psychological side of management the productivity impacts could potentially be even larger. She views her numbers as conservative. 

Recent research from 2017 disappointingly shows that Australia’s management scores are lower than most other developed nations. Van Reenen believes management training should be a top priority for businesses in 2024 and beyond as it directly correlates with improved business performance. “There are some clear drivers of better management practices, so the good news is that there are many ways that business leaders can up their game.”  

Based on this research and our knowledge of SMEs we’ve tailored Management training that can really make a difference to your success and profitability.